According to Trey Parker & Matt Stone, the idea for this episode came from when they were so tied up in the production of Team America: World Police (2004) that they had absolutely no idea what to write for South Park. The final scene is a parody of one of their writers meetings.
Butters starts reading comics from the newspapers. Some of those comics were actually in the previous Sunday's (14 November 2004) newspaper.
Second reference to crab people, the plot twist from "South Park is Gay".