Wednesday night's debate between Barack Obama and Mitt Romney underscored a core truth about America's presidential election season: the vast majority of the most consequential policy questions are completely excluded from the process. This fact is squarely at odds with a primary claim made about the two parties – that they represent radically different political philosophies – and illustrates how narrow the range of acceptable mainstream political debate is in the country.

In part this is because presidential elections are now conducted almost entirely like a tawdry TV reality show. Personality quirks and trivialities about the candidates dominate coverage, and voter choices, leaving little room for substantive debates.

But in larger part, this exclusion is due to the fact that, despite frequent complaints that America is plagued by a lack of bipartisanship, the two major party candidates are in full-scale agreement on many of the nation's most pressing political issues. As a result these are virtually ignored, drowned out by a handful of disputes that the parties relentlessly exploit to galvanise their support base and heighten fear of the other side.

Most of what matters in American political life is nowhere to be found in its national election debates. Penal policies vividly illustrate this point. America imprisons more of its citizens than any other nation on earth by far, including countries with far greater populations. As the New York Times reported in April 2008: "The United States has less than 5% of the world's population. But it has almost a quarter of the world's prisoners."

Professor Glenn Loury of Brown University has observed that these policies have turned the US into "a nation of jailers" whose "prison system has grown into a leviathan unmatched in human history". The New Yorker's Adam Gopnik called this mass incarceration "perhaps the fundamental fact [of American society], as slavery was the fundamental fact of 1850".

Even worse, these policies are applied, and arguably designed, with mass racial disparities. One in every four African-American men is likely to be imprisoned. Black and Latino drug users are arrested, prosecuted and imprisoned at far higher rates than whites, even though usage among all groups is relatively equal.

The human cost of this sprawling penal state is obviously horrific: families are broken up, communities are decimated, and those jailed are rendered all but unemployable upon release. But the financial costs are just as devastating. California now spends more on its prison system than it does on higher education, a warped trend repeated around the country.

Yet none of these issues will even be mentioned, let alone debated, by Mitt Romney and Barack Obama. That is because they have no discernible differences when it comes to any of the underlying policies, including America's relentless fixation on treating drug usage as a criminal, rather than health, problem. The oppressive system that now imprisons 1.8 million Americans, and that will imprison millions more over their lifetime, is therefore completely ignored during the only process when most Americans are politically engaged.

This same dynamic repeats itself in other crucial realms. President Obama's dramatically escalated drone attacks in numerous countries have generated massive anger in the Muslim world, continuously kill civilians, and are of dubious legality at best. His claimed right to target even American citizens for extrajudicial assassinations, without a whiff of transparency or oversight, is as radical a power as any seized by George Bush and Dick Cheney.

Yet Americans whose political perceptions are shaped by attentiveness to the presidential campaign would hardly know that such radical and consequential policies even exist. That is because here too there is absolute consensus between the two parties.

A long list of highly debatable and profoundly significant policies will be similarly excluded due to bipartisan agreement. The list includes a rapidly growing domestic surveillance state that now monitors and records even the most innocuous activities of all Americans; job-killing free trade agreements; climate change policies; and the Obama justice department's refusal to prosecute the Wall Street criminals who precipitated the 2008 financial crisis.

On still other vital issues, such as America's steadfastly loyal support for Israel and its belligerence towards Iran, the two candidates will do little other than compete over who is most aggressively embracing the same absolutist position. And this is all independent of the fact that even on the issues that are the subject of debate attention, such as healthcare policy and entitlement "reform", all but the most centrist positions are off limits.

The harm from this process is not merely the loss of what could be a valuable opportunity to engage in a real national debate. Worse, it is propagandistic: by emphasising the few issues on which there is real disagreement between the parties, the election process ends up sustaining the appearance that there is far more difference between the two parties, and far more choice for citizens, than is really offered by America's political system.

One way to solve this problem would be to allow credible third-party candidates into the presidential debates and to give them more media coverage. Doing so would highlight just how similar Democrats and Republicans have become, and what little choice American voters actually have on many of the most consequential policies. That is exactly why the two major parties work so feverishly to ensure the exclusion of those candidates: it is precisely the deceitful perception of real choice that they are most eager to maintain.

• This is an op-ed I wrote to appear in the Guardian newspaper