Hi Peter,
Unfortunately this post doesn't have your answer, but I do have a couple of questions. How are you connected to your computer? What program are you using to receive the data? Have you set up the baud rate parameters in the program? Why are you using Debug instead of Serout?
You also mentioned that your not sure if the program is running. The best thing to do then is make the PIC perform an output just before it loops. If you have an LED and a current limiting resistor then have the pic toggle the led each loop.