We used to do this all the time at school and at camp, sometimes we freshmen still do it before gym class starts when we're all sitting around. You sit in a circle with your left hand on top of someone else's right and your right hand under someone else's left, and you go in a circle smacking each other's hands as you sing the song:

Down by the banks of the hanky panky
where the bullfrogs jump from bank to banky
Singing eep, op, eep-op-op
bubblegum and soda pop
I pledge allegiance to the flag
Michael Jackson is a fag
Coca-cola brought him up
Now we're drinking 7-up
7-up has no caffeine
Now we're wearing Levi jeans
Levi jeans are out of style
Now we're talking for a while
skiddle diddle piddle bop
bubblegum and soda POP!

and whoever's hand is hit on the last 'pop' is out. Then you repeat the song getting faster and faster until somebody finally wins.

Sadly we really did and still do sing the line about Michael Jackson being a fag. In elementary and middle school we also had a similar rhyme ("I pledge allegiance to the flag and Michael Jackson is a fag. He used to play with little toys but now he plays with little boys.") and I can remember saying it at a very young age, before I had any idea what a 'fag' was. It was meant to be innocent and not offensive to anybody. Also, since Michael Jackson's death (may he R.I.P.) many people have substituted Lady Gaga or Miley Cyrus for Michael Jackson or changed that line to "Michael Jackson makes me gag". My particular group of friends has done both ("Lady Gaga makes me gag") and I think it's kind of a nice modern version of the song.