This is circa 1985 or so. I've read that Tiny Tim tried to pass it off as Santa having taken the unfortunately named diet pills that were fairly new at the time (Aides, if I remember correctly). I'm not buyin' it... At the time, a lot of people still weren't as aware of AIDS as in the last 15 years. Still offensive, but maybe not quite as much as if someone tried releasing this a few years later.
Edit: Ah, it was Ayds. They look like Caramels!