When in doubt, LIE
What's the deal?
"Lay" is a transitive verb, which means that it takes an object. That is, you have to lay or lay down something--a book, a card, your arms, or yourself as in, "Now I lay me down to sleep...."
The confusion comes in because the past tense of "lie" happens to be "lay." So you might say, "Yesterday I lay down on the couch." Or, if you want to shake up the old cliché, "George Washington lay here."
But seriously, how many times in your life have you had occasion to refer to the fact that someone was lying down at some point in the past? And of those occasions, how many times have you just used the perfectly acceptable "was lying" rather than "lay"?
I contend that most of us need to use the past tense of "lie" so rarely that we should act as if we never have to. You will almost never go wrong using "lie" when you're not sure about which verb to use.* And if you're like most people, you'll almost certainly make fewer mistakes using "lie" as your go-to verb than you're making now.
* I'm not worried about people suddenly starting to say "lie" when they should say "lay": "Lie down your arms!" Most people don't have trouble using the transitive verb "lay" correctly.
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