| It is subsidization, on too many fronts to name. If anything it has been too effective because it is quite invisible and taken for granted by the recipients, which then allows them to see their own life narratives as stories of succeeding in the market economy due to hard, honest work. The work may indeed be hard and honest, but it only succeeds at the costs and prices it succeeds at due to vast subsidies, which again are taken for granted (if even seen as such--or seen at all). The worst part is that even with this heavy subsidization the cost difficulties of modern infrastructure under sparse settlement leave non-urban residents feeling shortchanged despite the disproportionate spending they receive. Here's how that usually goes: basic infrastructure (roads, power, water, communications) has costs that scale roughly linearly in terms of how much you build: your build and maintenance cost are roughly proportionate to how many miles of road or miles of pipe or miles of wire, and so on. Thus as you have a population that is more widely spaced-out your effective per capita infrastructure costs go up: you have more road per person and more wires per person just to deliver the same level of capability. You often wind up, then, needing as much as 5x or more the per capita budget in a sparsely populated area to build and maintain infrastructure at a comparable level to a denser area (whether this is done or not is about administrative competence but that is a separate issue from the cost themselves). At a state level, however, it is hard to have wildly disproportionate per capita spending: you can maybe get away with spending 2-3x per capita on infrastructure in non-urban areas versus urban areas, but not 5-10x. But this spending-effectiveness discrepancy means that even with heavy subsidization--eg non-urban areas effectively getting 2-3x the infrastructure spend of the urban ones on a per capita basis--the spending outcomes will likely be better in the urban area because the cost efficiency is that much higher. This thus leaves the non-urban areas feeling neglected--the infrastructure isn't as well maintained etc--even though they are in fact already given disproportionate resources...they just aren't given resources that are disproportionate-enough! Ironically the "decaying small town" is the best proof of this effect: you go from comparatively well-maintained state highway to a city of 10-20k with crumbling streets and broken street lamps, etc., back to well-maintained state highway...because the state highway is subsidized by the entire state (and often federal funds), but that small town is on its own fundingwise, and reveals what the surrounding area can actually afford, sans subsidization from outside money. |
For example, the "much" higher cost of bringing phones to rural areas is a surcharge on your phone bill. In 2014 it was about $7 billion. That's a lot, but a complete joke compared to the federal budget. https://en.wikipedia.org/wiki/Universal_Service_Fund
Rural electricity is often run by co-op because the big power company doesn't think it's worth spending the money to string the power lines to everyone. So those folks are literally doing it themselves. And they pay for it in their power prices. http://www.electric.coop/our-mission/powering-america/
Rural water and sewer often doesn't exist again because the houses are too far apart for it to make financial sense to run the pipes. So people have wells and septic systems. That they pay to have installed and maintained out of their own pockets.
You can argue all you want about the road subsidy for state run roads and I'm sympathetic to it, to a point. But eventually all/most/some of those roads do in fact have to exist to get the food from the countryside into the cities. You might be able to make do with less rural roads, but certainly not none. I suppose you could argue that trains are all that's really needed (private investment) and that farmers can make and maintain their own gravel roads. But now we're just talking about funding the road maintenance in a different way, through higher food prices instead of taxes.
But for that to really work, everyone in every city would have to be willing to forego fresh vegetables and all collectively be OK with the corresponding health outcomes that would result.